Could new car buyers be looking at a year-end incentives blitz designed to help salvage annual sales figures through the injection of a serious amount of cash on the part of automakers? According to The Automotive News, most industry analysts are predicting exactly this outcome as the market inches closer to 2012 and inventories begin to be replenished after a difficult second and third quarter for many car companies.
The March earthquake and tsunami in Japan has lead to car dealers in the United States finding themselves short on supply when it comes to many popular models from brands such as Mazda, Toyota and Honda. With inventories beginning to return to normal, car companies are eager to make up for what in many cases was a “lost” summer selling season. In order to encourage new car buyers to jump on board, advertising budgets and cash back rebates and other incentives are likely to be pumped up to a level not yet seen this year.
The Automotive News reports that incentives strategies will vary depending on the manufacturer in question. Toyota will most likely elect to stay the course with its recently revised incentives packages, with an average of $1,900 spent per vehicle. Ford is currently spending $2,747 per vehicle in incentives on average, while the industry average is just over $2,400. In place of cash back increases, some manufacturers are expected to opt for more aggressive lease and financing rates.
Although major Japanese companies such as Toyota and Honda are currently near the bottom of the industry in terms of their incentives level, the rapidly-eroding market share of Japanese car companies as a whole could force the hand of executives concerned about giving up even more ground to surging Ford, Chrysler and General Motors. Between the beginning of 2011 and its second quarter, Japanese automakers saw their market share shrink by 6.7 points.
What does this mean for new car buyers? Unlike in years past, it might actually make sense to postpone a vehicle purchase past the end of the summer and instead take advantage of both greater inventory choice and lower pricing once the fall season has begun. Although no one is predicting a return to the level of incentives that were seen during the depths of the recession a few short years ago, the chance of more affordable new vehicle pricing becoming a reality over the course of the next 30 days is a real one.
